India’s shift toward competency-based hiring

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India’s shift toward competency-based hiring

Thursday, 31 October 2024 | Dinesh Sood

India’s shift toward  competency-based hiring

The focus on competency over credentials promises not only to improve employability but also to foster a more inclusive workforce

 India is moving towards skills-based hiring over degrees, marking a significant shift in the job market. Companies increasingly adopt competency-based hiring practices, focusing on practical skills and inclusivity rather than traditional degrees. This change is influenced by the growing importance of industry-relevant competencies in today's digitised business landscape. IBM India is a notable example of this trend, as it has implemented a 'skills-first' policy, where a college degree is no longer a prerequisite for recruitment. Similarly, companies like TCS, Infosys, and Wipro are also shifting towards skills-based hiring, investing heavily in training programs in the digital economy.

This shift has broad implications for India's education sector, prompting universities and educational institutions to incorporate more industry-relevant training and competency-based curricula.

Many Indian universities are partnering with businesses to offer specialized training in artificial intelligence, data analytics, cyber security, and beauty and wellness.

Recently, Medhavi University collaborated with Orane International, a pioneer global institute in beauty-wellness. Such collaborations aim to bridge the gap between academic knowledge and industry requirements, ensuring graduates are job-ready from day one. Reports have shown that such partnerships have significantly increased employability in specialized fields, highlighting the importance of aligning education with industry needs.Competency-based hiring is revolutionising university education and professional development in India. In today's technology-driven economy, continuous learning and upskilling are crucial for career advancement.

Companies like IBM, TCS, and Infosys heavily invest in training programs on the digital economy. These programs often include online courses, certifications, and micro-credentials, enabling employees to acquire new skills efficiently.

The Indian government recognizes that skills development is critical to national performance and economic growth. As reflected in the 2024 education budget, significant funding has been directed towards digital projects to prepare young Indians for a digital future.

Over the next five years, approximately 2 million young people will receive skills training. Additionally, 1,000 Industrial Training Institutes (ITIs) will be modernized, with updated course content tailored to industry needs.

This government support is crucial for India's ambition to remain a talent hub.India stands at a critical juncture in its economic journey, with immense potential for growth but facing a significant challenge in bridging the unemployment-employability gap. As the world's fifth-largest economy, India's vision for ''Viksit Bharat'' by 2047 hinges on effectively skilling its youth to meet the demands of a rapidly evolving job market.

The Union Budget 2024-25 has highlighted this priority, allocating substantial funds for education, employment, and skilling initiatives. However, the task ahead is daunting, with nearly 73% of workers aged 15-59 years lacking formal or informal vocational training.A multi-pronged approach is essential to harnessing India's demographic dividend and fueling economic growth. This includes bolstering institutional support, strengthening industry-academia connections, and leveraging innovative financing solutions like impact bonds. As India navigates this crucial phase, the success of its skill development efforts will play a pivotal role in shaping the nation's future and realizing its economic potential.Competency-based hiring transforms the job market and creates opportunities for diverse groups often excluded.

In India, many individuals seeking to re-enter the workforce—often in remote or part-time roles—benefit from this approach. During the pandemic, many women took online courses in digital marketing, content creation, and I.T. services while balancing home responsibilities. This shift towards skills-based hiring opens doors for a more inclusive and diverse workforce and paints an optimistic picture of the future of employment in India, full of opportunities and potential for growth.

India's thriving start-up culture is a testament to the adaptability and practical experience valued in skills-based hiring. Startups, often operating with limited resources, place less emphasis on educational background and more on the skills and potential of their employees.

As a result, startups are setting the pace in adopting skills-based hiring practices, inspiring more giant corporations to follow suit and revolutionise the job market. Their innovative approach to hiring is not only inspiring but also a sign of the changing times in the Indian job market.Transitioning to skills-based hiring comes with challenges, including the need for accurate and unbiased skills assessments.

Traditional hiring, reliant on academic qualifications, is relatively straightforward. In contrast, evaluating practical skills requires sophisticated testing and assessment techniques. Additionally, companies must train their H.R. teams to recognize and nurture talent based on skills rather than credentials.

Acknowledging these challenges is the first step towards overcoming them, and it prepares us for the future of hiring. By acknowledging these challenges, we can better prepare for the future of hiring and ensure a more effective and inclusive job market.

Despite these challenges, the benefits of competency-based hiring are evident. Companies can access a broader and more diverse talent pool by focusing on skills, including individuals overlooked by traditional hiring processes. This approach helps fill critical skills gaps and fosters a more inclusive and innovative workforce.

(The writer is co-founder and MD of Orane International, a training partner of the National Skill Development Corporation and a network Member of India International Skills Centres, an initiative of GoI.The views expressed are personal)

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